Exercise 16-2 Your answer is partially correct. Try again Tamarisk Inc. issued $3,950,000 of 10%, 10-year convertible bonds on June 1, 2017, at 99 plus accrued interest. The bonds were dated April 1, 2017, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2018, $1,481,250 of these bonds were converted into 25,000 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion (a) Prepare the entry to record the interest expense at October 1, 2017. Assume that accrued interest payable was credited when the bonds were issued (b) Prepare the entry to record the conversion on April 1, 2018. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) No. Account Titles and Explanation Debit Credit (a) Interest Expense 98750 Interest Payable 98750 Cash 197500 Discount on Bonds Payable 1339 (b) Bonds Payable 1481250 Discount on Bonds Payable 13558 Common Stock 500000 Paid-in Capital in Excess of Par - Common Stock 967692 Click if you would like to Show Work for this question: Open Show Work